Congress created Amtrak in 1970 to relieve freight railroads of their responsibility to provide intercity passenger rail service. In exchange, Congress required the freight railroads to permit Amtrak to have access to their rail lines.[1] In 1973, Congress codified the requirement to give Amtrak trains “preference” over freight trains. Under federal law, “Amtrak has preference over freight transportation in using a rail line, junction, or crossing.”[2]

In the Commerce Committee hearing, Senator Wicker prefaced his questions to the nominees with a monologue about Amtrak’s right to proceed ahead of freight traffic when Amtrak and a freight train converge at the same time. Senator Wicker explained that under the current legislative framework, “Amtrak has preference over freight transportation in using a rail line.” But, he expressed concern that the law is not stringently followed – “in reality freight railroads have consistently denied such preference to Amtrak, in fact only 47% of long distance [passenger] trains were on-time at stations in FY 2017 and this is largely attributable to freight’s refusing to provide preference to passenger rail.”

See Senator Wicker’s statement here: (skip to 1:14:20 – 1:15:16)

At this time, preference can only be enforced through U.S. Department of Justice action.[3] The STB’s authority to hear on-time performance complaints relating to preference is in question after a decision at the 8th Circuit and a series of decisions in the D.C. Circuit.[4] Amtrak has asked Congress to provide it with a private right of action to enforce its statutory preference rights.[5]

The Northern Lights Express intercity rail proposal, connecting Minneapolis and Duluth, Minnesota with a stop in Superior, Wisconsin, advanced forward following a Finding of No Significant Impact (“FONSI”) from the Federal Railroad Administration (“FRA”). The FRA’s decision found that the proposed rail project would not have any significant environmental impacts and allows the project to advance beyond the environmental phase.

Project proponents envision a rail service connecting six stations operating across existing BNSF Railway track. The Northern Lights Express trains would travel at 90 miles per hour over 152 miles. The new rail service would operate four round trips per day. The majority of the track is in Minnesota, but 23 miles will cross Wisconsin.

The project would require construction of 42 miles of mainline and sidings to permit the Northern Lights Express passenger trains to share the corridor with BNSF Railway’s freight trains. In order to accommodate higher passenger train speeds, the project requires rehabilitating the existing rail line, which will require new turnouts, crossovers, and improving the ballast.

The FRA, acting as the lead federal agency, provided $5 million in grant funding and the Minnesota DOT provided $3 million for the environmental analysis, preliminary engineering, service development, and financial management plan. Although, FRA’s issuance of a FONSI is a significant step forward for the project, funding for the final design and construction has so far not been identified.

]]>https://www.infrainsightblog.com/2018/03/articles/rail-and-transit/northern-lights-express-proposed-passenger-rail-service-receives-federal-environmental-approval/feed/0Contract Awarded for GO Transit Improvements in Scarborough and Unionvillehttps://www.infrainsightblog.com/2018/03/articles/rail-and-transit/contract-awarded-for-go-transit-improvements-in-scarborough-and-unionville/
https://www.infrainsightblog.com/2018/03/articles/rail-and-transit/contract-awarded-for-go-transit-improvements-in-scarborough-and-unionville/#respondTue, 13 Mar 2018 22:00:47 +0000https://www.infrainsightblog.com/?p=2680Continue Reading]]>Infrastructure Ontario and Metrolinx have awarded a fixed-price design-build-finance $245.5 million contract to upgrade Agincourt, Milliken, and Unionville GO stations on the Stouffville GO corridor. The winning bidder, EllisDon Transit Infrastructure (EDTI), will deliver the project using Infrastructure Ontario’s Alternative Financing and Procurement model. EllisDon constituents will provide financing and construction while WSP / MMM Group will be in charge of the design. The project includes upgrades to tracks, platforms with canopies, new pedestrian connections, and new amenities at the three stations.

The scope of work also includes a new grade separation with a railway overpass bridge at Steeles Avenue. Design work is expected to begin this month, with construction beginning in September 2018 and substantial completion planned for December 2020.

The Stouffville Corridor Stations Improvement project is part of the larger GO Regional Express Rail (RER) program, one of the largest transit infrastructure investments in North America. The Province of Ontario is investing $21.3 billion to transform the GO Transit Network from a commuter transit system to a regional rapid transit system, with electrified service on core segments, across the Greater Toronto and Hamilton Area over the next decade. The number of weekly trips across the entire GO rail network is projected to grow from 1,500 to 6,000 by 2024-2025.

]]>https://www.infrainsightblog.com/2018/03/articles/rail-and-transit/contract-awarded-for-go-transit-improvements-in-scarborough-and-unionville/feed/0A Path to Federal P3s for Infrastructure? ABA Subcommittee Suggests Changes to OMB Budgetary Scoringhttps://www.infrainsightblog.com/2018/02/articles/p3s/a-path-to-federal-p3s-for-infrastructure-aba-subcommittee-suggests-changes-to-omb-budgetary-scoring/
https://www.infrainsightblog.com/2018/02/articles/p3s/a-path-to-federal-p3s-for-infrastructure-aba-subcommittee-suggests-changes-to-omb-budgetary-scoring/#respondFri, 02 Feb 2018 22:28:11 +0000https://www.infrainsightblog.com/?p=2669Continue Reading]]>Much has been said already about President Trump’s call to “rebuild our crumbling infrastructure,” in his first State of the Union address. The President asked Congress to advance a $1.5 trillion infrastructure plan that, in part, should be “leveraged by partnering with state and local governments and, where appropriate, tapping into private sector investment.”

But not all “crumbling infrastructure” is state and local infrastructure. The federal government’s infrastructure also needs attention (e.g., river locks, some dams and levees, federal buildings, etc.). In late January of this year, a purported summary of President Trump’s infrastructure “funding principles” briefly described two strategies for funding federal infrastructure: a planned executive order allowing for disposal of federal assets and creation of a federal capital financing revolving fund, presumably to help federal agencies finance their improvements.

Notably absent among these “funding principles” is availability of the P3 delivery strategy for federal assets. The likely reason is a remaining federal barrier: the need to change the federal Office of Management and Budget’s (OMB) relevant scorekeeping guidelines when evaluating a large-scale, federal capital project.

Scorekeeping guidelines measure the budget effects of a proposed federal contract relative to the contracting agency’s budget authority. For federal obligations under federal projects involving private capital, OMB Circular A-11 requires that all of any long-term obligation be “scored” in the first fiscal year, rather than in each fiscal year of the obligation. A fundamental, favorable risk allocation under many P3 structures is to contract for design and construction, but also to shift associated capital costs, to a private partner in exchange for the promise of repayments and a return over time. By scoring all such payments in the first year, the federal entity cannot realize this benefit of a P3.

On the same day as the State of the Union address, an American Bar Association committee published a white paper, titled “The Crisis in the Federal Government’s Infrastructure: Additional Approaches to the Current Federal Budgetary Scoring Regime.” The Committee’s paper – a follow on to a white paper originally published in 2008 – was previewed in late November in a discussion about removing federal barriers to infrastructure development, which was held in Washington D.C. among the paper’s authors, President Trump’s Special Assistant for infrastructure, D.J. Gribbin, and several interested government employees, decision- and policy-makers, and private practitioners in the infrastructure space. Both papers describe in detail and then confront the impediment that the Circular A-11 scorekeeping guidelines pose to federal use of P3s, which effectively frustrate use of P3 project delivery to address pressing federal infrastructure needs.

In the 2008 paper, the Committee offered solutions to modify Circular A-11 scorekeeping guidelines to align the federal government with best practices for state and local (and international) infrastructure funding: changing certain scoring criteria, considering lease payments on the basis of their present value, treating sale/leaseback, purchase options or infrastructure projects as “operating leases” (thus removing them from the onerous scoring rule); and offering a menu of risk assessment, valuation and legislative change suggestions that lower projects costs or offer longer-term payment streams outside of the budget cycle.

The 2018 paper adds two suggestions. First, score the federal government’s costs on net present value of cash flows from the government over the life of the transaction, taking into account the private party’s obligations and adjustment for the risk of private party default, similar to its 2008 suggestion. Second, create “safe harbors” for infrastructure projects that allow annual scoring similar to that described above, arguing that existing and long-standing federal contracts that employ energy savings performance contracts (ESPCs) effectively do just that.

The removal of budgetary scoring impediments to consideration of new strategies for federal infrastructure projects – particularly those that have proven successful like P3s – merits consideration. As the President appears to be advocating for a partnership with state and local jurisdictions to solve many infrastructure challenges, the ABA papers offer suggestions to help solve the deficit of investment in federal infrastructure projects.

]]>https://www.infrainsightblog.com/2018/02/articles/p3s/a-path-to-federal-p3s-for-infrastructure-aba-subcommittee-suggests-changes-to-omb-budgetary-scoring/feed/0Bombardier and Metrolinx Make a Nice Recovery on Problematic Eglinton LRV Orderhttps://www.infrainsightblog.com/2017/12/articles/rail-and-transit/bombardier-and-metrolinx-make-a-nice-recovery-on-problematic-eglinton-lrv-order/
https://www.infrainsightblog.com/2017/12/articles/rail-and-transit/bombardier-and-metrolinx-make-a-nice-recovery-on-problematic-eglinton-lrv-order/#respondFri, 22 Dec 2017 20:38:16 +0000https://www.infrainsightblog.com/?p=2648Continue Reading]]>Bombardier and Metrolinx announced that they have amended their Eglinton Crosstown LRV contract and settled their pending arbitration, showing how re-negotiation and compromise can preserve project schedule and quality, cement customer relationships and eliminate financial uncertainty.

Under the agreement, Bombardier’s LRV production is dramatically cut from 182 to 76 vehicles. However, Bombardier also secured an 18 month extension on its Metrolinx-owned GO Transit operations and maintenance contract. The amended contract “resets the relationship … and brings certainty to the completion of this project,” Bombardier officials said. The financial terms are not disclosed, but Bombardier deserves credit for this recovery.

The Eglinton Crosstown line is scheduled to open in 2021. In May of 2017, in order to ensure vehicle supply for start-up, Metrolinx ordered 61 Citadis Spirit LRVs from Alstom, including 44 slated for potential deployment on Eglinton Crosstown line. Assuming Bombardier delivers on the amended order, Metrolinx will deploy the Alstom vehicles on the Hurontario light-rail project. A Metrolinx press release said: “This new agreement is positive news for commuters who can continue to have full confidence that we are building an excellent transit system for them. We are focused on building a great Eglinton Crosstown LRT with reliable vehicles that are delivered on-time – this is a decisive and significant step towards that goal.” Kudos to Metrolinx, for first ably implementing a feasible vehicle supply contingency plan for Eglinton and then negotiating to secure a portion of the original Bombardier order.

]]>https://www.infrainsightblog.com/2017/12/articles/rail-and-transit/bombardier-and-metrolinx-make-a-nice-recovery-on-problematic-eglinton-lrv-order/feed/0Home Stretch for Toronto’s Finch West LRT Procurementhttps://www.infrainsightblog.com/2017/12/articles/rail-and-transit/home-stretch-for-torontos-finch-west-lrt-procurement/
https://www.infrainsightblog.com/2017/12/articles/rail-and-transit/home-stretch-for-torontos-finch-west-lrt-procurement/#respondMon, 18 Dec 2017 21:52:31 +0000https://www.infrainsightblog.com/?p=2644Continue Reading]]>Humber College students and Toronto West residents will soon be able to access Canada’s largest subway system in five years. The CA$1 billion Finch West LRT project is slated to open in 2022. The new dedicated light rail transit line will run 11 kilometres along the surface of Finch Avenue from Humber College’s north campus to the new Finch West subway station on the Toronto-York Spadina Subway Extension that opened yesterday. There will be 16 surface stops and 2 below-grade termini at Humber College and the subway station. The Finch West LRT project includes a maintenance and storage facility for the light rail vehicles.

Infrastructure Ontario and Metrolinx issued a Request for Proposals to three shortlisted bidders on February 20, 2016 to design, build, finance and maintain the Finch West LRT project:

Humber Valley Transit Partners, including SNC-Lavalin, Graham, ACI;

Mosaic Transit Group, including ACS, Aecon, and CRH; and

FACT Partners, including EllisDon, Bechtel, and Herzog Transit.

Following an extension of the proposal due date, the procurement was stalled to allow time for the resolution of a dispute between Metrolinx and Bombardier over repeated delays in the supply of a light rail vehicle prototype and subsequent vehicles for Toronto-area lines. Procurement restarted in May 2017 after Metrolinx announced that it had entered into a new supply contract with Alstom as the alternative supplier of the vehicles.

All three teams have submitted their proposals by the new deadline on December 13, 2017. The preferred proponent is expected to be identified in Spring 2018.

]]>https://www.infrainsightblog.com/2017/12/articles/rail-and-transit/home-stretch-for-torontos-finch-west-lrt-procurement/feed/0New York MTA Approves $1.8B Design-Build Contract for the Long Island Railroad Expansion Projecthttps://www.infrainsightblog.com/2017/12/articles/transportation-infrastructure/new-york-mta-approves-1-8b-design-build-contract-for-the-long-island-railroad-expansion-project/
https://www.infrainsightblog.com/2017/12/articles/transportation-infrastructure/new-york-mta-approves-1-8b-design-build-contract-for-the-long-island-railroad-expansion-project/#respondFri, 15 Dec 2017 19:25:48 +0000https://www.infrainsightblog.com/?p=2635Continue Reading]]>The New York Metropolitan Transportation Authority’s (NYMTA) board has approved a $1.8 billion expansion project for another important milestone in Governor Andrew M. Cuomo’s, comprehensive, interconnected plan to improve transit and transportation throughout the New York metropolitan region.

The project includes signal system and bridge state-of-good-repair elements, but the central element is the addition of a 9.8-mile third track between Floral Park and Hicksville, NY on a segment of the LIRR mainline that handles more than 250 trains per weekday.

Governor Cuomo announced the project in January of 2016 and a two-step procurement process was approved by the MTA Board in November of 2016. Four bidders were pre-qualified; MTA convened a series of one-on-one meetings with the bidders. Three of the bidders submitted design-build proposals, which were reviewed by technical committees, including staff from the LIRR, MTA and NY Department of Transportation. The Final Selection Committee, comprised of railroad, transportation, and construction industry experts, reviewed the technical and price proposals during the summer before pricing negotiations this fall.

Beginning in January 2018, the contractors will work to complete design, surveying, mobilization, utility relocations, and other early construction activities. Major construction is expected to begin in late 2018 with project completion in 2022.

Design-build is not new to MTA. MTA has successfully used design-build in other recent projects such as the new Gov. Mario M. Cuomo Bridge, and LIRR’s Ellison Avenue Bridge and Post Avenue Bridge replacements.

]]>https://www.infrainsightblog.com/2017/12/articles/transportation-infrastructure/new-york-mta-approves-1-8b-design-build-contract-for-the-long-island-railroad-expansion-project/feed/0P3 Lawyer Appointed Federal Railroad Administration Chief Counselhttps://www.infrainsightblog.com/2017/11/articles/p3s/p3-lawyer-appointed-federal-railroad-administration-chief-counsel/
https://www.infrainsightblog.com/2017/11/articles/p3s/p3-lawyer-appointed-federal-railroad-administration-chief-counsel/#respondMon, 20 Nov 2017 21:45:26 +0000https://www.infrainsightblog.com/?p=2630Continue Reading]]>President Trump recently appointed former Seyfarth Shaw LLP (“Seyfarth”) attorney Juan D. Reyes, III as Chief Counsel of the Federal Railroad Administration (“FRA”). Mr. Reyes was previously a partner in the real estate department of the New York City office of Seyfarth and he led the firm’s P3 practice. Proponents of P3s may be pleased to have a Chief Counsel that understands the potential benefits of P3s.

The appointment of Mr. Reyes marks a continuation from the Obama Administration of appointing counsel with P3 experience. President Obama’s first FRA Chief Counsel, Karen Hedlund, a partner at Nossaman LLP prior to her appointment, also had considerable expertise with P3s. Prior to the Obama administration, the FRA Chief Counsel position was more often staffed with an attorney focused on the FRA’s safety mission. The appointment of Mr. Reyes may indicate that the current administration will pursue an infrastructure legislative package that includes P3s as part of that effort.

]]>https://www.infrainsightblog.com/2017/11/articles/p3s/p3-lawyer-appointed-federal-railroad-administration-chief-counsel/feed/0Sonoma-Marin Area Rail Transit District Begins Revenue Passenger Servicehttps://www.infrainsightblog.com/2017/08/articles/rail-and-transit/sonoma-marin-area-rail-transit-district-begins-revenue-passenger-service/
https://www.infrainsightblog.com/2017/08/articles/rail-and-transit/sonoma-marin-area-rail-transit-district-begins-revenue-passenger-service/#respondMon, 28 Aug 2017 18:18:26 +0000http://www.infrainsightblog.com/?p=2576Continue Reading]]>The Sonoma-Marin Area Rail Transit (“SMART”) District kicked off passenger rail revenue service in Sonoma and Marin counties last week. The 43-mile rail line includes ten stations from the Sonoma County Airport to Downtown San Rafael.

The new service operates across former Northwestern Pacific Railway Co. (“NWP”) rail line. Acquisition of the rail line dates back to 1969 when the California Legislature directed the Golden Gate Bridge, Highway, and Transportation District to develop a transportation facilities plan. In its plan, the district recommended the preservation of right-of-way for rail service on the rail lines of the NWP.

Various public agencies acquired portions of the NWP corridor through the 1980s and 1990s when the California Legislature created the Northwestern Pacific Railroad Authority (“NWPRA”) to hold title to the right-of-way. The California Legislature then created the SMART District in 2002 to develop passenger rail service across the line and to dissolve the NWPRA. SMART only has authorization to operate passenger service. Freight rail is managed by another creature of the legislature, the North Coast Railroad Authority which outsources freight rail service to a short line operator.

SMART seeks to expand rail service to Larkspur, California. The expansion would extend the rail line 2.2 miles. The Larkspur extension is currently in the design phase.

]]>https://www.infrainsightblog.com/2017/08/articles/rail-and-transit/sonoma-marin-area-rail-transit-district-begins-revenue-passenger-service/feed/0STB Jurisdiction Over Intrastate Passenger Railhttps://www.infrainsightblog.com/2017/07/articles/rail-and-transit/stb-jurisdiction-over-intrastate-passenger-rail/
https://www.infrainsightblog.com/2017/07/articles/rail-and-transit/stb-jurisdiction-over-intrastate-passenger-rail/#respondMon, 17 Jul 2017 19:44:26 +0000http://www.infrainsightblog.com/?p=2559Continue Reading]]>In Florida, All Aboard Florida, a private entity, is about to launch passenger rail service from Miami to West Palm Beach, with future service extending to Orlando. In California, the California High-Speed Rail Authority is currently constructing a high-speed passenger rail line with the long-term goal of connecting the metro areas of San Francisco and the Los Angeles. These projects have a common denominator: each envisions intercity passenger rail service entirely within one state. But when it comes to economic regulation by the federal government, these projects are treated differently by the Surface Transportation Board (the “STB”).

STB jurisdiction carries with it preemption of state and local remedies, so STB regulation of an intrastate project can have a significant impact. Not all proponents of intrastate projects want STB jurisdiction. But, for those that do, preemption carries with it a powerful tool against would be project opponents.

STB Jurisdiction under ICCTA

STB jurisdiction over transportation by rail carrier is governed by 49 USC § 10501(a), enacted under the Interstate Commerce Commission Termination Act (“ICCTA”). The STB’s jurisdiction “applies only to transportation in the United States between a place in …a State and a place in the same or another State as part of the interstate rail network.[1] Under ICCTA, Congress specifically granted the STB authority over intrastate rail transportation if the transportation is part of the interstate rail network.

The question then becomes, how does the STB decide that an intrastate passenger rail project is part of the interstate rail network? To answer this question, the STB applies a factoring test.[2] Factors the STB will consider include whether the rail carrier will operate within a single state, whether the rail carrier will interchange with Amtrak (an interstate rail carrier), whether the rail carrier will arrange through ticketing with Amtrak, or whether the system is interconnected with Amtrak through use of the same stations.

All Aboard Florida

Applying those factors to the Florida project mentioned above, the STB concluded that it did not have jurisdiction because the project was not part of the interstate rail network.[3] The Board considered the following factors that weighed against asserting its jurisdiction:

The project would conduct operations entirely within the state of Florida;

All passengers will board and deboard at local stations;

The fact that the project would serve local airports did not weigh toward a determination that it was part of the interstate rail network. Additionally, the fact that the line is to be constructed within the freight corridor of an STB regulated freight railroad, the Florida East Coast Railway (“FECR”), on track owned by the FECR did not sufficiently connect it to the interstate rail network. Nor did the fact that FECR will dispatch the passenger trains cause the STB to consider extending its jurisdiction over the project.

California High-Speed Rail Authority

In the STB’s California High-Speed Rail Authority (“CHSRA”) decision[4], the STB concluded that a proposed intrastate high speed rail system was sufficiently connected to the interstate rail system to warrant STB jurisdiction over the project. The STB’s conclusion relied on a factoring analysis that gave significant weight to the CHSRA’s relationship with Amtrak.

Several factors in the CHSRA proposal weighed against a determination that the project was sufficiently connected to the interstate rail network to justify STB jurisdiction. First, the CHSRA proposal lies entirely within the state of California. Second, the CHSRA had no agreement with Amtrak to permit through ticketing for the CHSRA project.

Despite the intrastate nature of the transportation and the lack of a thru-ticketing agreement with Amtrak, the STB determined that other aspects of the CHSRA’s proposal provided sufficient interconnectivity with Amtrak as to conclude that the proposed project was connected to the interstate rail network and justified STB jurisdiction. The STB cited the CHSRA business plan and environmental documents to demonstrate the CHSRA planned to integrate with Amtrak through a “blended” approach to the construction and operation of the project. This blended approach proposed:

Operating Amtrak’s San Joaquin service operating over the CHSRA tracks;

Locating CHSRA’s stations in Los Angeles, Sacramento, and San Jose so that the CHSRA project interconnected with Amtrak stations.

The STB distinguished the facts from the CHSRA project with those from its All Aboard Florida decision. The STB said that it did not have jurisdiction over the Florida project “because the proposed rail line would serve only four local stations with no plans for through-ticketing and no connection to Amtrak or any other rail carriers.”

Conclusion

In determining whether it has jurisdiction, the STB views some type of arrangement with Amtrak as a factor because Amtrak is an interstate rail carrier. But, the STB has not had the opportunity to consider a case where the intrastate passenger rail project holds an arrangement with some other type of interstate carrier. Must the intrastate passenger rail project connect to another interstate railroad? What if the intrastate project stopped at an airport and offered through ticketing with an interstate airline? It might be a tough argument to sell to an agency primarily focused on transportation by rail, but with the right facts, the STB may be willing to extend its jurisdiction to an intrastate passenger rail carrier that connects to interstate commerce beyond Amtrak.